In the wake of a scathing audit report, the board of directors of the city-owned Sony Centre should go, a city committee says.

Despite hosting performers such as Lana Del Rey, seen at her Sony Centre show earlier this month, the venue still requires an annual subsidy, says Toronto's auditor general, who also found fault with renovation expenses.

Toronto is moving to turf the Sony Centre board in the wake of a scathing audit of the city-owned theatre, which has seen renovation costs balloon to $40 million from $28.5 million with minimal city oversight.

City council’s audit committee recommended Wednesday that the 13-member board be replaced by an interim six-person body that would pick a new chief executive officer for the downtown theatre.

Council will decide at its next meeting June 10 and 11.

Auditor general Jeff Griffiths stressed that the city needs to monitor a major renovation like this one to ensure city policies on procurement and construction management are followed.

“I find it astounding that the city had no involvement whatsoever in the project,” Griffiths said. “Obviously, they (city) were aware that the project was taking place but they decided to take a hands-off approach.”

Current chief executive Dan Brambilla, scheduled to leave June 30, attended the audit committee at city hall. He refused to speak to reporters.

The committee voted unanimously for Councillor Shelley Carroll’s motion that the old board be replaced by a new six-person board of three councillors and three senior city staffers.

Carroll said the new board will provide interim management control, hire a new chief executive and start reviewing the theatre’s operating agreement with the city that hasn’t been updated since 1968.

Griffths’ report, made public earlier this month, found “significant issues” with how $23 million in construction contracts were awarded.

“The majority of contracts we reviewed were not awarded through open and competitive procurement processes, “ Griffiths wrote. “In addition, documentation relating to the justification for sole-sourcing contracts is deficient and in some cases does not exist.”

The 3,100-seat theatre at Yonge and Front Sts. was closed in June 2008, and reopened Oct. 1, 2010. It still needs $4 million in exterior work to be done after next year’s scheduled completion of the condo tower being built on top of the theatre.

The facility still requires about $1 million in annual subsidies from the city, the audit said.

“Very simply the major purpose of the redevelopment was to ensure that the centre was self-financing and not reliant on the city for ongoing costs,” Griffiths said. “In spite of spending close to $40 million, this has not been accomplished.”

Griffiths told the committee the audit became more time consuming and complex after it was discovered that documentation on the renovation wasn’t available.

“We specifically asked for certain documentation only to be told it was not available or had not been retained. To be clear, the lack of documentation was significant.”

City manager Joe Pennachetti said the audit findings came as a surprise. He said the failings identified by the auditors aren’t widespread.

“I do want to say this is not the City of Toronto in general,” Pennachetti said. “This is not happening in city divisions.”

Pennachetti is one of the three top officials tapped to go on the Sony board, along with the city’s chief financial officer, Rob Rossini, and deputy city manager Brenda Patterson.

Carroll said she may step aside if Councillor Michael Thompson, chair of economic development, is interested in the post.

“I do feel some changes at the Sony Centre do need to happen,” said Crawford, head of a task force looking at the three city-owned theatres; Sony, St, Lawrence Centre and Toronto Centre for the Performing Arts.

Councillor Paula Fletcher, who gave up her seat on the Sony Centre board last month to Councillor Pam McConnell, said she agrees with the proposal.

Fletcher believes the existing board should not be the ones to pick a new chief executive when there are only months remaining in their term.

Councillor David Shiner, who would also lose his Sony Centre seat, said the renovations were carried out largely under the board that was in place from 2006 to 2010.

“The board that was here during the renovation process is gone,” Shiner said. “I don’t understand what’s going on, when the current board is trying to rein in what’s been happening at the Sony Centre.”

With files from Betsy Powell

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